During a press conference today, BoJ Governor Kazuo Ueda highlighted the potential economic repercussions of the persistently weak yen, particularly its effect on trend inflation through increased costs of imported goods.
“There’s a possibility the weak yen could push up trend inflation through rises in imported goods prices,” Ueda noted, indicating that such a scenario “might lead to a change in monetary policy.”
At the same occasion, Finance Minister Shunichi Suzuki pointed out that exchange rates are not solely influenced by interest rate differentials. Various other factors, such as each country’s current account balance, market participants’ sentiment, and speculative trade, drive currency moves,” Suzuki explained.
